The Safely Sourcing China Blog

China – Games Consoles And The Scam

More than a few people have discussed XBOX and Games Consoles, and I’ve often been asked about sourcing them.

I’d like to make specific mention of this issue briefly here.

The Parallel or Grey Importing of Goods.

I’ll talk about parallel or grey importing using computers as an example first, and then follow on to briefly discuss games consoles and Xboxes.

Brand name electrical goods and computers CAN be found here in China.

However, when you start trying to take them from China (or anywhere else) into other countries, then you fall into an area known as parallel or grey importing. Many companies are now really cracking down on this, particularly SONY™ for instance, in co-operation with the EU, there has a been a dramatic increase in seizures of goods at ports.

The parallel or grey market is the trade of something legal through unofficial, unauthorized, and usually unintended distribution channels.

For example: To export anything made by Dell™ in China, to the US, would be considered by Dell™ US to be poaching on their territory.

Sometimes the practice of parallel or grey importing is illegal, but not always so.

Many of the parties concerned with the parallel or grey importing of a good are usually the authorized agents or importers, or other retailers of an item in the target market. More often than not this is the national subsidiary of the manufacturer, or one of its related companies. In response to the ensuing damage to both their profits and their reputation, many manufacturers, and their official distribution chains will very often seek to restrict the parallel or grey market.

Such responses can breach competition law, particularly within the European Union.

Competition law, in the United States is known as antitrust law.

Refusal to Honour Warranties

Manufacturers have the right to refuse to honour the warranty of an item purchased from parallel or grey market sources, on the grounds that the higher price you should have paid on the non-grey market reflects a higher level of expected service.

Additionally, companies may provide the warranty service only from the manufacturer’s subsidiary only from within the intended country of import, and not in the diverted third country to where the parallel or grey goods are ultimately sold by the unauthorised distributor or retailer.

Are you prepared to make money at any cost?

Are you the kind of person who’d sell grey or parallel goods to someone, irrespective of the effective lack of any genuine warranty on those goods?

Do you not care about the end user, your client, and your own reputation?

Because, if your answer is ‘yes‘ to the first two questions, and ‘no‘ to the third one, then I really don’t see much difference between you and the scammers.

In my opinion, if you’re buying grey or parallel, then you’re obviously a bit shady yourself.

The response by scammers to the grey market is particularly evident in the electronic goods market, where I hear people crying loudly at having been ripped and burned regularly!

Yes, it seems to be the people endeavouring to buy games and game consoles, along with iPhones etc., who are the one’s who get burned most frequently by the scammers.

Just by virtue of wanting these goods grey or parallel, you put yourself at the scammers table, and if you’re unlucky (which you most probably will be) you’ll find yourself on a scammers dinner plate too.

If that’s you, or you’re thinking about entering this line of business, then I suggest you find another product line to trade in, one that you can get direct from a good OEM/ODM in China.

Remember, the scammers love those who love to buy grey!

Related Articles

• Computer makers’ tech support quality compared (crunchgear.com)
• Do You Really Want More Companies Using Social Media? (socialmediatoday.com)
• Microsoft offers EU choice on Windows browsers (theregister.co.uk)
• Nintendo Wii Debuts With New Black Finish, U.S. Market Gets Left Out (inquisitr.com)
• Chinese iPhone to sell 1 million units first year (crunchgear.com)
• EU Antitrust Regulator Scolded For Simply Ignoring Evidence In Intel’s Favor (techdirt.com)
• Do You Really Want More Companies Using Social Media? (myventurepad.com)
• Intel tells EU court antitrust fine violated its human rights (arstechnica.com)
• EC criticized for conduct during Intel investigation (arstechnica.com)
• U.S. wins major WTO fight with China (thestar.com)
• WTO Win Could Open China’s Door to US Companies (abcnews.go.com)
• Parallel or Grey Importing And The Scammers Behind It (safelysourcingchina.com)
• EC criticised over Intel case (theregister.co.uk)
• Tools and Tactics of the Growth Team: Successful Go-to-Market Strategies for New Product Launch (slideshare.net)

Originally posted 2009-08-13 05:31:50. Republished by Blog Post Promoter

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This entry was posted on Wednesday, February 24th, 2010 at 11:19 PM and is filed under Scams And Scammers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.